Money Talk$

Lew DeLuca, CoordinatorStudent Financial Literacy & AdvisingSouthern CT State University, WT 138

delucal2@southernct.edu203-392-8862

www.southernct.edu/financial-advising

Financial Literacy & Advising

• Paying for College (SCHOLARSHIPS, etc.)• Saving for College (529s, etc.)• Resources (CashCourse.org)• Facts & Tips ($48, $68,779)• Financial Literacy News• Financial Planning Guide• Federal Loan Repayment• Customized Financial Plans

Life = Making Decisions

• Spending habits begin at an early age• Needs (food, shelter, clothing, relationships,

degree) vs. wants (most everything else)• Use a money management calendar & create a

monthly spending diary • $4.00 coffee/day = $1,460/year• “Live like a college student in college, so that

you don’t have to live like one after graduation”

Develop a BudgetINCOME EXPENSES

Grants Tuition & Fees

Scholarships Books & Supplies

Employment Housing

College savings Food

Family assistance Transportation

Loans Health and/or Child Care

Other Entertainment

Loan Fees

Other

Borrow $ = Pay >Worth

• Trust from Lender to repay (with interest)• Loan = legal obligation (MPN)• >$29,000 nationally vs. <$25,000 Southern• NSLDS.ed.gov (national student loan data

system)• Student loans appreciate in value– If earn $25,000/ year more with a degree– X 40 years to work = $1 million more/lifetime

• Invested $25,000 for ROI of $1 million

$ Saving Tips

• EARN MORE THAN YOU SPEND!!!• Buy used or rent textbooks • Use college student discounts• Borrow for needs vs wants• Limit financial aid refunds• Pay unsub. Stafford loan interest quarterly• Continued contact with lender now & then

Credit Cards build Credit Ratings

• Have one card, no annual fee, low interest rate and use sparingly

• Pay bill in-full and on-time (46% do not)---OR---

– If $10 bill with 20% interest that goes unpaid then $2 interest + $35 finance charge + $40 late fee = $87

– If $1,000 bill and pay the minimum monthly it will take 13 years to pay a total of $2,129

Credit Bureau Ratings

• Credit = borrowed $ used to determine credit worthiness & repayment probability

• Free @ www.annualcreditreport.com• Range 300 to 850 to approve or deny loan• Unpaid bills for >90 days go into collections

then in default• Most information appears for 7-10 years• Credit score > GPA

Videos

• Regular People: Cosby Show– https://www.youtube.com/watch?v=-1t9dg5dzQo

• Sesame Street’s Sunnier Financial Days– https://www.youtube.com/watch?v=Y0PjzgRY_fA

Pay Day

• Gross pay versus Net pay – $48,000 salary = $4,000/month ???

• Less deductions for taxes, SS, medic-/dental, IRA, FICA, union dues, 529, etc.

• Pay yourself first = save 10% of paycheck– Retirement: IRAs, 401/3 (i.e. 5% you & 8% co.), etc.– Rule of 72 (72/interest rate to double your $)– Compound interest ($75/month for 5 yrs = $4,500

earning 5% = $5,122)– Diverse portfolio (savings, money market, stocks, mutual

funds, & bonds)